Capital Stock, Warrants and Stock Options

12 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Note 6 - Capital Stock, Warrants and Stock Options

Authorized

The total authorized capital is as follows:

- 300,000,000 common shares with a par value of $0.001 per common share; and

- 10,000,000 preferred shares with a par value of $0.001 per preferred share

Issued and outstanding

On September 30, 2014, the Company issued 34,889 common shares to employees of the Company, at a price of $7.50 per share, in settlement of arrears compensation obligations of $261,665.

On October 17, 2014, the Company issued 6,659,487 common shares, at a price of $0.1875 per share, in settlement of a secured loan facility, which included any unpaid and accrued interest, totaling $1,248,654. In conjunction with the issuance of these common shares, the Company incurred $40,400 in share issuance costs.

On December 31, 2014, the Company issued 11,333 common shares to employees of the Company, at a price of $7.50 per share, in settlement of arrears compensation obligations of $85,000.

For the above share issuances, the shares were not registered under the Securities Act of 1933 in reliance upon the exemptions from registration contained in Regulation S of the Securities Act of 1933. No underwriters were used, nor were any brokerage commissions paid in connection with the above share issuances.

Warrants

As at June 30, 2016, the aggregate weighted average intrinsic value of 13,333 warrants outstanding was $0, and the weighted average grant date fair value of each warrant outstanding was CAD $11.25. The 13,333 warrants expired on August 4, 2016.

Stock Options

On November 14, 2014, the vested and non-vested portion of the 400,000 stock options granted to purchase common shares by directors, officers and employees were cancelled or forfeited.

On February 17, 2015, the Company granted a total of 1,182,667 stock options to purchase common shares to directors, officers and an employee of the Company, at an exercise price of $0.1875 per share and for a term of 5 years.

Stock based compensation expense, resulting from the vesting of stock options for the year ended June 30, 2016 was $60,961 (2015 - $162,794), which is included in operation and administration expense on the statements of operations and comprehensive loss.

The fair value of stock options was determined on the date of grant using the Black-Scholes valuation model, and using the following underlying assumptions:

Year	Risk free interest rate		Dividend yield			Volatility		Weighted average life
2015	1.62% – 2.09	%		0	%	125.00% - 127.32	%	5 years

The following table summarizes the stock option activity during the period being reported on and ending June 30, 2016:

Description	Options		Weighted average exercise price ($)
Outstanding, July 1, 2014		446,667		3.75
Granted		1,182,667		0.1875
Exercised		-		-
Expired or forfeited		400,000		2.80
Outstanding, June 30, 2015		1,229,334		0.61
Exercisable, June 30, 2015		440,889		1.36
Outstanding, July 1, 2015		1,229,334		0.61
Granted		-		-
Exercised		-		-
Expired or forfeited		46,667		11.25
Outstanding, June 30, 2016		1,182,667		0.1875
Exercisable, June 30, 2016		1,182,667		0.1875

The following table summarizes the information on stock options outstanding at June 30, 2016:

Stock options outstanding								Stock options exercisable
Exercise prices		Number of options		Weighted average exercise price		Weighted average remaining life in years		Number of options		Weighted average exercise price
$	0.1875		1,182,667	$	0.1875		3.64		1,182,667	$	0.1875

As at June 30, 2016 there were 1,182,667 stock options outstanding, exercisable at a weighted average exercise price of $0.1875 per share, and expiring on February 17, 2020.